Hepatic encephalopathy (HE) is a neuropsychiatric disorder caused by chronic or acute liver failure. Nearly thirty years ago a hypothesis was formulated explaining the neuropathology of HE by increased GABAergic tone. Recent progress in the GABAA-receptor (GABAAR) molecular pharmacology and biochemistry as well as the physiology of GABAergic transmission provided better understanding of GABA's role in health and disease. A detailed analysis of neuronal populations and their GABAergic afferents affected in HE is still missing. The slow progress in understanding the pathology of GABAergic transmission in HE is due to the high complexity of brain circuitries controlled by multiple types of GABAergic interneurons and the large variety of GABAAR, which are differently affected by pathological conditions and not yet fully identified. The mechanisms of action of the GABAAR agonist taurine, allosteric positive modulators (inhibitory neurosteroids, anaesthetics, benzodiazepines and histamine) and inhibitors of the GABAAR (excitatory neurosteroids, Ro15-4513) are discussed with respect to HE pathophysiology. Perspectives for GABAergic drugs in the symptomatic treatment of HE are suggested.